SEC says client rosters create potential for conflicts
More than half of U.S. pension consultants or their affiliates provided products and services to both pension plan advisory clients and to money managers and mutual funds on an ongoing basis, according to a study released today by the U.S. Securities and Exchange Commission.
For some of these consulting firms, the compensation received from money managers comprised a significant part of their annual revenue, the report notes.
“It is clear from our examinations that many pension consultants must do more to identify conflicts of interest in their activities and to take steps to mitigate or eliminate those conflicts,” says Lori Richards, director of the SEC Office of Compliance Inspections and Examinations.
In the course of its examination, SEC staff reviewed documents and information from a cross-section of 24 pension consultants who are registered with the SEC as investment advisors.